Major currency pairs experienced limited movements on Monday due to a lack of high-tier economic data. On Tuesday, the European Central Bank will release Negotiated Wage Rates for Q4, while the US will see regional manufacturing surveys and the Consumer Confidence Index.
The US Dollar Index started the week under selling pressure, reaching below 106.20 but later fluctuated above 106.50. The index has been affected by a cautious market mood.
EUR/USD opened positively, rallying above 1.0500 but entered a consolidation phase above 1.0450. GBP/USD experienced a minor decline, remaining above 1.2600, while USD/JPY initially rose but retreated to 149.60.
Japan’s Corporate Service Price Index showed a 3.1% year-on-year increase in January. Gold prices reached an all-time high above $2,955 before correcting to below $2,940.
Market participants began the week with subdued price action, given the absence of data releases capable of driving volatility. As we advance into Tuesday, attention will turn towards Europe’s latest wage figures and survey-based indicators from the United States, which could shift sentiment if they outperform or disappoint. These releases, while not top-tier, will still provide insight into economic momentum.
The US Dollar came under pressure in early trade, pushing the Dollar Index towards 106.20. However, as sentiment remained cautious, the index found some footing and rebounded above 106.50. This back-and-forth movement suggests that markets are waiting for clear direction from incoming data before making decisive moves. The way investors react to Tuesday’s figures will set the stage for how the currency behaves in the coming days.
The Euro gained some traction at the start of the week, climbing past 1.0500 against the Dollar. However, as buyers struggled to maintain momentum, the pair drifted lower but held above 1.0450. Similarly, Sterling faced mild selling pressure yet managed to remain above the 1.2600 threshold. The Japanese Yen saw an early push higher in USD/JPY, only to reverse course towards 149.60. The movement in this pair highlights traders taking profits amid uncertain risk sentiment.
Japan’s latest Corporate Service Price Index showed a 3.1% increase from a year earlier, reinforcing the view that pricing pressures remain persistent in the services sector. While this is not the primary inflation gauge for monetary policymakers, it does offer clues about how inflation dynamics are playing out beneath the surface. This could become more relevant as markets assess future moves by the Bank of Japan.
Commodities saw a volatile start to the week, particularly in gold. The precious metal surged to a fresh record above $2,955 before retreating slightly below $2,940. Price swings of this nature underscore the tug-of-war between safe-haven demand and profit-taking by short-term traders. With inflation and geopolitical risks still in focus, gold’s ability to hold elevated levels will be key in gauging broader market sentiment.
For traders dealing in derivatives, volatility expectations and positioning around these developments will be key in shaping short-term strategies. While the lack of major events on Monday kept price action restrained, the unfolding data cycle could lead to sharper moves as expectations adjust accordingly.
